Average American Credit and Debt Statistics

American Consumers Have Reached Record-High Debt Levels

Mar 5, 2009 Ryan Smith

Most Americans use their credit wisely despite analyst predictions for a tough consumer credit environment in 2009.

Economic analysts are expecting 2009 to be a bad year for consumer credit with expected losses reaching the $70 billion mark. Many experts expect lenders to cut their lending by an expected $2 trillion in an effort to mitigate damages from the downturned economy.

Record-High Debt Levels

American consumers have reached record-high debt levels. In October of 2008, credit card debt reached $1 trillion. According to the Federal Reserve, that is a 25% increase in just five years. Consumers are also responsible for $10.54 trillion in mortgage debt, with foreclosures quickly on the rise.

Unemployment is up, consumer confidence is down, and the country is now in a recession. However, the majority of American consumers are managing their debts in a responsible manner.

Most Consumers Use Credit Wisely

Fair Isaac, the company that helps calculate FICO scores, has released data that shows how Americans are using their credit. What they found through analyzing millions of consumer credit profiles is that the average consumer is using credit wisely.

The average consumer has 13 credit accounts, including both credit cards and installment loans. Four of these accounts are installment loans, such as auto loans, bank loans, and mortgages. The other 9 accounts are credit cards and store cards.

40% of credit card users have a balance of less than $1,000. In fact, close to 50% of all consumers have less than $5,000 in debt when you don’t include their mortgages. Only 37% of consumers carry more than $10,000 of non-mortgage debt.

The average credit card user has credit limits that amount to $19,000. Half of all borrowers use less than 30% of their total credit card limits. Fewer than 15% of consumers are at or near their credit card limits.

Most consumers aren’t applying for new credit. The average consumer only has one inquiry on his or her credit report in the past year. In fact, fewer than 6% of all borrowers have four or more inquiries that reveal a search for new credit. An inquiry shows up on a credit report each time a consumer applies for credit.

Paying the Bills

Fair Isaac reports that the majority of today’s consumers are paying their bills on time. Despite an increase in defaults, more than half of all consumers have never been reported 30 days or more late on a payment. In fact, only 30% of consumers show a late payment of over 60 days. Only 20% of consumers have ever had an account closed by a lender due to default. That leaves 80% of consumers paying their obligations in full.

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Americans using credit